AT&T Corp., suffering from prolonged price declines, said yesterday its job cuts this year will be deeper than previously stated and it will take charges of $12.5 billion in the third quarter, largely to write down assets.

AT&T said its job cuts for 2004 will exceed 20% of the total work force, a much more aggressive reduction than the 8% goal set earlier in the year.

Roughly 75% of the more than 12,000 employees affected have already left the company or been notified, the Bedminster, N.J., telecommunications company said in a press release. The reductions affect positions in all three of AT&T’s divisions and include more than 5,000 job cuts disclosed when the company reported second-quarter earnings in July, said spokesman Jim Byrnes.

AT&T declined to break out the layoffs by division or location.

In addition to a $1.1 billion restructuring charge to cover layoffs, AT&T said it will take an impairment charge of $11.4 billion in the third quarter. The asset impairment charge reflects the company’s shift away from traditional consumer services, price cuts, and outdated technologies for corporate customers, AT&T said.

AT&T said the more aggressive job cuts are the result of the July decision to stop marketing traditional consumer service as well as automation and other technology that reduces the need for employees.

AT&T, long one of the nation’s largest corporate employers, has been hit this year with intensifying price wars in its business services division and new regulations unfavorable to its consumer division.

At the end of the second quarter, AT&T had roughly 57,000 employees, a fraction of the million-plus salaries that made up its payroll before it was deregulated and split into the Baby Bell system in 1984. Hundreds of thousands of those employees split off with the regional Bell companies in 1984 and the more recent spinoffs of Lucent Technologies Inc. and AT&T Wireless Services Inc.

By the end of 2002, when AT&T had divested the cable businesses it bought in the 1990s, its work force had shrunk to 71,000 and has kept falling since. Over the last decade, AT&T has weathered steep price declines in its flagship long-distance services, first for consumers and more recently in the more complex data services for corporate customers.

Telecom and data services for large corporations are now AT&T’s core offering. In July, AT&T said it will no longer pursue residential customers for traditional long-distance service, once the company’s bread and butter.

The company said the asset write-down will reduce its depreciation expense by about $1 billion in the second half of the year. The job cuts and other cost reductions are improving profitability, AT&T said, particularly in the consumer division, where marketing expenses are lower.

AT&T said it expects yearend cash flow in line with previous estimates, and anticipates ending the year with less than $7 billion in net debt.

The chief executive, David Dorman, who took the helm in 2002 after Comcast Corp. bought the cable division, is thought to be positioning AT&T for a sale. BellSouth Corp. came close to buying AT&T late last year, but pulled out of the deal at the last minute.

Although media reports cited valuation as the deal breaker in the 2003 discussions, neither BellSouth nor its peers appear eager to grab AT&T at its current discount of nearly 40% to the $24-a-share price that was mulled a year ago. AT&T shares closed at $15.04 yesterday, down 16 cents.

At an investor conference Wednesday, the chairmen of BellSouth, SBC Communications Inc., and Verizon Communications said they were not interested in acquiring a large long-distance company in the near term.